The news: Consumers in Q1 began ditching the sweatpants they’ve worn throughout the pandemic and refreshed their wardrobes as they returned to in-person occasions such as social events, travel, and the office. That drove strong sales at a number of retailers that primarily sell apparel across several different price points.
A shift in spending: US households allocated more of their spending to physical goods throughout the pandemic than before both because of demand for goods such as work-from-home furniture and because the cost of goods has risen faster than inflation.
A return to normal: “[Our] customers are excited for a return to normal,” said Richard Hayne, Urban Outfitters CEO, during the retailer’s earnings call. “They’re shopping in stores again and are out and about with family and friends, traveling, dining-out, and going to many, many events. Customers are shopping to accommodate their social calendars and the products they’re choosing are those tailored specifically for going-out moments.”
It isn’t good news all-around: While many apparel retailers have benefited from the shifting behavioral patterns, there are also several merchants that have struggled with myriad challenges such as supply chain disruptions and rising inflation.
The big takeaway: While Q1 was generally good for apparel retailers, there are signs that inflation is taking a toll on shoppers.